The UAE’s announcement of withdrawal from OPEC and the OPEC+ alliance has entered the energy markets into a new phase of uncertainty, not only because of Abu Dhabi’s production weight, but also because the decision comes at a very sensitive moment, with the continuing unrest in the Middle East and the Strait of Hormuz due to the Iran war.
The decision, which will enter into force on May 1, 2026, does not merely represent a country’s exit from two oil organizations, but rather raises a broader question about the future of OPEC and OPEC Plus’ ability to manage supply, control prices, and maintain the image of cohesion that has formed one of the most important elements of their strength over the past decades.
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Although the UAE asserts that the withdrawal does not change its commitment to market stability, and that it will continue to increase production “gradually and thoughtfully,” the timing of the step and the size of the withdrawing country make it different from previous withdrawals by countries such as Angola, Ecuador, and Indonesia.
Cohesion test
Speaking to Al Jazeera Net, the economic researcher specializing in energy affairs, Amer Al-Shobaki, believes that what happened cannot only be read as a country’s withdrawal from an oil organization, but rather as a transition to a deeper conflict within the oil system, related to who has the right to lead the oil market in the next stage.
According to Al-Shoubaki, the UAE’s withdrawal does not mean the immediate collapse of OPEC or OPEC Plus, but it strikes one of the organization’s most important assets, which is the image of collective cohesion and discipline. The seriousness of the decision, from the economist’s point of view, is that it was issued by a central Gulf state with a high production capacity and a clear ambition for expansion, and not by a small producer with limited influence.
He points out that the quota ceilings within OPEC Plus were restricting the UAE’s ability to transform its huge investments in production capacity into actual production and direct returns. Hence, he believes that the decision reflects a political and oil rift within the producing house itself, and may become a precedent that encourages other producers to demand renegotiation, or rebel against the quota system.
The quota system is a regulatory mechanism adopted by OPEC and the OPEC Plus alliance to control the volume of global oil supply, as a reference “baseline” for the production of each member state is determined, and then a specific percentage of reduction or increase is imposed that is applied to everyone equally, with the aim of balancing supply with demand, and ensuring price stability in international markets.
As for energy expert Nihad Ismail, he believes that the withdrawal of an important and active member, and the third largest producer within the organization, will create, at least temporarily, a state of confusion and destabilization within OPEC. He points out that over the past years, the UAE has expressed objections to OPEC Plus restrictions, and has demanded larger production quotas, in line with its plans to raise production.
But Ismail, on the other hand, points out, during his talk to Al Jazeera Net, that OPEC has been subjected to multiple shocks and withdrawals in its history, yet it remained in place, which means that the decision alone is not enough to rule the end of the organization’s role.
Market control
The primary function of OPEC and OPEC+ is to coordinate production to help control supply and mitigate price fluctuations. But the UAE’s exit raises a question about the coalition’s ability to continue this function, especially if Abu Dhabi tends to gradually increase its production outside the quota system.
Amer Al-Shobaki believes that OPEC Plus was relying on three main tools: production quotas, voluntary cuts, and surplus capacity that can be pumped when needed. From his point of view, the UAE’s exit weakens both the quota and surplus energy tools, as a result of part of the flexible Gulf energy leaving the collective decision-making system.
He adds that the full impact of the decision may not appear immediately due to the disturbances in the Strait of Hormuz and the war in the region, but it will become more clear when the crisis resolves. Then the market will face a pivotal question: Will the UAE pump according to its national accounts, or according to the rhythm of other producers?
Al-Shoubaki points out that free UAE production may put downward pressure on prices when stability returns to energy markets, while the disintegration of coordination raises the risk premium in times of crises.
On the other hand, energy expert Mamdouh Salama offers a less pessimistic reading, as he believes that the UAE’s exit will slightly affect OPEC’s position, but it will not undermine the ability of OPEC Plus as the largest player in the global oil market. According to Salama, the coalition will recover quickly and resume its role in directing oil policy globally.
Speaking to Al Jazeera Net, Salama believes that the UAE’s exit will not fundamentally affect OPEC’s ability to control prices, because Abu Dhabi will produce outside OPEC what it was producing inside it, and its actual ability to exceed its production levels is not open without limits.
OPEC alone contributes approximately 26% to 30% of the global oil supply, and the percentage rises to approximately 48% for the contribution of the OPEC Plus bloc (this alliance includes the 12 OPEC countries, in addition to 10 non-OPEC countries led by Russia).
Maximize return
The UAE decision goes beyond the regulatory dimension within OPEC to a broader question related to the energy investment strategy within the Gulf. The producing countries are now facing a delicate equation, which is how to maximize the returns from low-cost oil before the map of global demand changes due to the energy transition.
In this context, Al-Shobaki believes that the UAE’s decision redefines oil investment in the Gulf from the logic of collective commitment to the logic of maximizing national return. Abu Dhabi, according to the same spokesman, does not want to spend billions of dollars on increasing production capacity, and then remain governed by quotas that do not allow it to convert this energy into revenues.
It is considered that the Gulf no longer deals with oil only as a daily price, but rather as a strategic asset that must be monetized politically and economically, before the window of long-term demand narrows, or the structure of the energy market changes.
As for Nihad Ismail, he believes that the UAE wants complete independence in production and export and building partnerships and joint projects without dictates from the major partners within OPEC Plus. Therefore, the decision to withdraw reflects a desire for freedom of movement more than a mere technical dispute over quotas.
On the other hand, Mamdouh Salama believes that the decision will not affect investment policies in the oil and gas sector in the Gulf countries, considering that the main difference is that the UAE will make these investments alone, while other countries continue to cooperate within OPEC to secure the required investments.
The new equation
The UAE’s exit also opens the door to questions about the position of the United States and Russia in the energy market, as this exit may have a relatively positive impact on Washington because it may contribute to expanding the role of producers outside of OPEC Plus, especially in light of the United States being the largest oil producer in the world.
Al-Shobaki believes that the UAE’s exit gives the United States an additional opportunity, but does not give it a blank check. American shale oil is no longer growing at the same pace it witnessed between 2014 and 2019, due to financing pressures, capital discipline, and rising service costs.
However, any weakness in OPEC+’s ability to coordinate supply gives the US producer more room to influence global prices.
As for Salama, he rejects a direct link between the UAE’s exit and the strengthening of the United States’ role, considering that the decision will not increase or decrease US oil production, and believes that the United States, despite being the largest global producer, still needs to import large quantities of oil to meet its needs.
As for Russia, Al-Shoubaki believes that it will be one of the most sensitive parties to the decision. Since 2016, the OPEC+ bloc has given it an important platform of influence, as Moscow no longer only sells oil, but also participates in engineering the global price. According to him, the UAE’s exit weakens the framework from which Moscow benefits politically and financially, but in return, it may push it to deepen its position within the coalition and show itself as an indispensable partner to Saudi Arabia.
As for Salama, he believes that the decision will not affect Russia’s position within OPEC Plus, as it is a major player in the oil and energy markets, and is capable of making decisions that serve its interests, whether alone or in cooperation with other producers.
Record withdrawals
The UAE’s exit from OPEC is not the first of its kind, but it may be one of the most sensitive due to its production weight and geopolitical timing. The organization has witnessed several withdrawals since its founding in 1960 in Baghdad by Saudi Arabia, Iraq, Kuwait, Iran, and Venezuela.
Among the most prominent countries that have withdrawn from OPEC is Qatar, which announced in December 2018 its exit after a membership that lasted for about 57 years, justifying the decision by focusing on the liquefied natural gas sector. Angola also withdrew at the end of 2023 after disputes related to production quotas, considering that its membership no longer achieved the gains required for its oil ambitions.
Ecuador also withdrew more than once, as it left the organization in 1992, then returned in 2007, before withdrawing again in 2020 for financial and production reasons. As for Indonesia, it suspended its membership after it changed from an exporting country to an importing country, then returned for a short period before withdrawing again. Angola also left the organization in 1995 and returned to it in 2016 due to disagreements over production quotas.
